Are You Covered?

Despite an improving housing market and a stock market up double-digits this year, a recent survey by Bankrate.com finds that Americans don't have enough saved to cover emergency situations like the loss of their job.

"About 27% of Americans have no emergency savings whatsoever and about 24%, fewer than one in four, have what we would call a sufficient emergency savings cushion, enough to cover about six month's worth of expenses," explains Bankrate.com's Greg McBride.

The survey shows even though they're feeling better about their overall financial situation, they know they're vulnerable when it comes to setting something aside.

"Savings is the one area where people consistently have a dour outlook because they know how under-saved they are," McBride says.

Financial analysts suggest the best way to increase your financial cushion is to save your money before you spend it.

"You have to pay yourself first. Set up direct deposit from your paycheck into a dedicated savings account before you have a chance to spend it," McBride advises. "If instead you wait until the end of the month and try to save what's left over, far too often nothing's left over."

Even in an improving economy it still can take a long time to find a new job, and many economists warn that your new paycheck may not be as big as your old one.

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